Sigma Designs Reaches Agreement with Warner Special Products to Offer Hit
Music Videos in MPEG Format for the PC

INXS First Artist Available in the ReelMagic Format

FREMONT, Calif., July 27, 1994--Sigma Designs, Inc. (NASDAQ:SIGM), the
industry leader in low-cost MPEG products for the PC, today announced that
it will offer hit-music videos in the ReelMagic Moving Picture Experts
Group (MPEG) compact disc format for personal computers. Based on an
agreement signed earlier this year with Warner Special Products, a unit of
Warner Music Group, the world's leading music company, Sigma Designs plans
to offer a selection of five ReelMagic-compatible music videos from
Warner's roster of artists. INXS' Greatest Video Hits 1980-1990, a top
collection from the Grammy-nominated band, will be the first music video
title available in this format, allowing PC users to experience the impact
of full-screen, full-motion digital video with CD-quality sound. Available
in August, the ReelMagic music video CD from INXS will expand Sigma
Designs' line of robust ReelMagic-compatible entertainment and educational
software titles.

Under the terms of the agreement with Warner Special Products, Sigma
Designs will have the rights to distribute five Warner music video CDs in
the MPEG format as bundled options with its ReelMagic products, to its OEM
partners and to end users through the ReelMagic Software Catalog.

ReelMagic is a ground-breaking MPEG add-on controller for personal
computers that allows playback of full-screen, full-motion digital video
and CD-quality digital audio from a standard CD-ROM drive. Software
encoded in the MPEG format can be decompressed in realtime and played back
at 30 frames-per-second (fps), resulting in smooth, high-quality video
that rivals S-VHS quality. Sigma Designs will port the Warner music videos
over to the ReelMagic MPEG format, allowing CD-ROMs encoded in this format
to be played on personal computers equipped with ReelMagic boards.

"We are pleased to be working with Warner Special Products, the leader in
licensing original master recordings in motion pictures, television
programs and commercials," said Thinh Tran, chairman and CEO of Sigma
Designs. "Sigma is proud to be the first computer company to let PC users
watch popular artists like INXS perform on their computer screens with
quality full-screen, full-motion video. The MPEG compression standard,
which our ReelMagic controller is based on, is the enabling technology for
digital video. In the near future, we expect to see an explosion in MPEG
software, providing consumers with a powerful and realistic experience on
their PC."

ReelMagic is available now from Sigma Designs for a suggested retail price
of $449. The ReelMagic CD-ROM Upgrade Kit, which includes the ReelMagic
board, a double-speed CD-ROM drive, a pair of speakers, and an array of
popular MPEG software titles, is also available for a suggested retail
price of $799. ReelMagic Lite, offering sound card owners a cost-effective
MPEG video and audio upgrade solution, is available for a suggested retail
price of $349. All ReelMagic controllers come with a five year warranty on
parts and labor.

Sigma Designs, headquartered in Fremont, Calif., is a leading manufacturer
of technologically advanced multimedia products, including affordable MPEG
video and audio decompression hardware. All Sigma Designs products are
sold worldwide through a network of dealers, distributors and original
equipment manufacturers. For sales information, call (800) 845-8086, (510)
770-0100, or fax (510) 770-2641.

Sigma Designs Inc
46501 Landing Parkway
Fremont, CA 94538

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